What Price Can I Afford?

What Price Can I Afford?

As you consider the idea of buying an income-producing property, it’s important you not focus on the sales price but that you focus on the entire sales package:

Financial Sales Package is comprised of the price, sales structure, terms, down-payment, and the flexibility of the seller in assisting with the financing.

Operational Sales Package could include the amount of land, equipment list, retail inventory list, current reputation, desire of the buyer to maintain vs evict the former clientele, retention of current employees, location, surrounding area, availability of opportunities to expand operations, and so forth.

With each business you evaluate, a buyer needs to outline at least the following:

Your available cash

Expected cash flow of the business

The sales price

The amount, if any, the seller is willing to finance

The amount a bank would need to finance (which involves your net worth; a discussion we’ll discuss in another blog)